Control zones Bitcoin 10/09/19

The defining support level is 7990.94. While bitcoin is trading above it, the probability of an upward movement remains high. The level test should be considered for the appearance of a pattern to buy. The first growth target will be the weekly maximum, and further growth will depend on the emergence of a large buyer above the monthly maximum.

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The fall in the second half of September was strong, so the current situation looks like an opportunity to work in the continuation of the bearish momentum. To sell the instrument, you will need to close trading below the balance level or open a new day's trading below it. This will lead to a change in structure and allow sales to be considered as a continuation of the medium-term momentum.

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Daily CZ – daily control zone. An area formed by important data from the futures market that changes several times a year.

Weekly CZ – weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ – monthly control zone. An area that reflects the average volatility over the past year.

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So will it be QE4 or not? (downside risks of EUR/USD and GBP/USD pairs remain)

Global markets continue to be in a fever amid a lack of full clarity of the expected actions of the Fed aimed to support the national economy. In addition, another disruption of the US-China negotiation process by the US Department of Commerce, which has blacklisted new companies from China, also does not please investors.

In his speech on Tuesday, Fed Chairman J. Powell asked the markets not to confuse the current measures taken to increase reserves with quantitative easing (QE), which is rumored about in world markets. In addition, the chairman of the Federal Reserve said that this was just a "technical issue" and nothing more. Yes, in his commentary, he said that there are external risks to the American economy, but not so much as to take drastic measures. In his opinion, the time has come to expand the balance in order to maintain an appropriate level of reserves. What was still important in his words was the statement that the Federal Reserve would not strive for negative interest rates and, in general, in his opinion, the current easing of conditions is similar to the situation that the regulator took in the mid-90s of the last century.

Against such a background, which Powell left behind, who somewhat disappointed the markets, who were expecting, if not a direct copy of the situation in the early 10s, the era of QE, then similar financial conditions, investors bought protective assets on Tuesday, although it should be recognized that the dynamics of these action was still not so significant.

Moreover, the market received another signal about the duality of the position of the Fed during a speech by Fed member C. Evans. On the one hand, he announced that he continues to expect economic growth next year at 2.0%, and on the other, he noted the weakness of business investments to shift risks upwards and the need for a slightly more noticeable impulse.

It seems that financial markets, following the results of Powell and Evans' speeches, as well as amid news of the failure of the next meeting of representatives of China and the United States on trade, decided to take a break and watch how new measures to support the US economy will be implemented. This scenario will contribute to increased volatility and chaos in the markets, as investors will nervously respond to economic statistics from the United States, as well as any news on the subject of US-Chinese trade negotiations.

Today, the focus of the market will be the publication of the minutes of the September meeting of the Fed, but in our opinion, it will not have a noticeable effect on investor sentiment, unless, of course, it reveals some hidden points in the expected new course of the Fed.

Forecast of the day:

EUR/USD is consolidating above the level of 109.50 amid a lack of a clear picture of investors on future Fed stimulus measures. As long as this problem exists, the pair will remain under pressure. Lowering the price below 1.0950 may lead to its limited decline to 1.0880.

GBP/USD pair froze above the level of 1.2200 in anticipation of the latest Brexit news. The continuing risk of Britain leaving the EU without a deal will cause a new fall in the sterling rate. From a technical point of view, a decline in the pair below the level of 1.2200 may become the basis for its local decline to 1.2100.

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Analysis of EUR / USD and GBP / USD for October 9. The head of the European Parliament, David Sassoli, announced two alternatives

EUR / USD

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Tuesday, October 8, ended for the EUR / USD pair with a decrease of another 15 basis points, and the instrument managed to complete the fourth unsuccessful attempt to break through the Fibonacci level of 61.8% during the day. Thus, we can say that at the moment, the markets are inclined towards sales of the euro currency again, although the news background in recent days is absolutely empty or, at least, is not negative for the euro currency. I would expect a new increase in the euro-dollar pair only after a successful attempt to break through the level of 61.8%. Up to this point, rather high chances remain to complicate the downward trend section and its internal wave 5.

Fundamental component:

The news background for the euro / dollar pair now comes down only to the daily speeches of Fed President Jerome Powell. At first glance, his speech yesterday could cause strong sales of the US dollar and, as a result, the euro increase, which is what the current wave count suggests. However, in practice, the words that the Federal Reserve is planning to start purchasing short-term securities (bills), that is, to increase its balance again, did not cause much resonance in the foreign exchange market. In addition, Powell immediately explained to the markets that this was not a new phase of the QE program, but only a temporary repurchase of assets in order to "maintain a normal level of reserves." Thus, there was no panic in the market, and the American currency remained in the same place it was before Powell's speech.

Purchase goals:

1.1109 - 0.0% Fibonacci

Sales goals:

1.0876 - 127.2% Fibonacci

1.0814 - 161.8% Fibonacci

General conclusions and recommendations:

The euro-dollar pair has allegedly completed the construction of a downward set of waves. At the same time, until a successful attempt to break through the 61.8% Fibonacci level, certain chances remain for complicating wave 5 of the downward trend section with targets located around 1.0876 and 1.0814. Therefore, with instrument purchases, I recommend being careful for now.

GBP / USD

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On October 8, GBP / USD lost another 75 base points and thus, confirmed its readiness to build a bearish wave c. If this assumption is true, then the decline will continue with targets located below 22 figures again, and with a favorable news background (for the dollar), much lower than 22 figures. Currently, I expect to build at least a 3-wave descending structure, but we can see a full-fledged 5-wave trend section in the future.

Fundamental component:

The next round of talks between Boris Johnson and his European colleagues did not bring any results. Moreover, Angela Merkel said yesterday that Northern Ireland should remain in the Customs Union and only in this case London should count on an agreement with Brussels. All proposals by Boris Johnson are rejected. Also yesterday, the head of the European Parliament, David Sassoli, announced the absence of any progress in negotiations with Johnson, as well as about alternative options for Brexit. According to Sassoli, it is possible now to either extend the terms of Brexit, or the absence of a deal and the exit of the United Kingdom without an agreement on October 31. Thus, almost all the officials directly involved in the Brexit negotiation process recognized that it is almost impossible to conclude an agreement at the current stage. In this case, there really are only two options: either move Brexit to a later date, or disagree without agreement. It remains only to understand which of the options will be implemented. For the pound, by the way, both options are negative, but the first still leaves hope for the favor of the market for the British currency.

Sales goals:

1.2147 - 76.4% Fibonacci

1.2013 - 100.0% Fibonacci

Purchase goals:

1.2582 - 0.0% Fibonacci

General conclusions and recommendations:

The pound / dollar instrument supposedly continues to build a new bearish trend section. Thus, now, I expect the continuation of the decline of the instrument in the direction of the levels 1.2147 and 1.2013, which corresponds to 76.4% and 100.0% Fibonacci in the construction of wave 3 or c. The MACD signal "down" indicated the transition of the instrument to the construction of a new bearish wave.

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Control zones USDJPY 10/09/19

Yesterday's decline of the pair led to the test of the WCZ 1/4 106.97-106.92. Holding the price above this zone indicates a set position in both directions. The resistance is WCZ 1/2 107.57-107.47. Its test will again look for a pattern to sell the instrument. The target of the downward movement remains the October minimum.

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Working in the flat implies a partial closure of positions on opposite borders. Closing trades above weekly extremes will be required to exit the flat.

To break the downward structure, it will be necessary to close the US session above the level of 107.57. If this happens, then purchases will come to the fore, and the first goal of growth will be the maximum of the last month. The probability of implementing this model is 30%, which makes it auxiliary.

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Daily CZ – daily control zone. An area formed by important data from the futures market that changes several times a year.

Weekly CZ – weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ – monthly control zone. An area that reflects the average volatility over the past year.

The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on October 9. Brexit risk without a deal will continue to put pressure on the British

To open long positions on GBP/USD you need:

Yesterday's news that the EU was not happy with Boris Johnson's proposal again led to increasing likelihood of a Brexit without a deal, which put pressure on the British pound and returned the market to a downward trend. For purchasing, I recommend focusing on a support of 1.2177, near which bullish divergence on the MACD indicator can form, which will be the first signal to open long positions, the main goal of which will be to return to a resistance of 1.2241. Only after consolidating above this range can we discuss the topic of an upward correction to the resistance of 1.2284, where I recommend profit taking. If the situation with Brexit continues to aggravate, and most likely it will happen, it is best to consider new long positions after updating lows in the areas of 1.2150 and 1.2112.

To open short positions on GBP/USD you need:

Today it is best to sell the pound after the formation of a false breakdown in the resistance area of 1.2241, slightly above which the moving averages are located. However, a more important task for the bears will be to break through and consolidate under the support of 1.2177, which will increase pressure on GBP/USD and will lead to updating lows of 1.2150 and 1.2112, where I recommend taking profits. However, be careful, as during the first test of the level of 1.2177, the pair may increase against the background of the divergence formed on the MACD indicator. In case the pound grows above resistance at 1.2241 in the first half of the day, you can count on short positions immediately on a rebound from a high of 1.2284.

Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, which indicates a bearish nature of the market and a further decline in the pound.

Bollinger bands

A break of the lower boundary of the indicator at 1.2210 will increase pressure on the British pound, while a break of the upper boundary at 1.2220 may lead to a larger upward correction.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

Overview of GBP/USD on October 9th. Forecast according to the "Regression Channels". Boris Johnson remains the only one to

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction – up.

The lower channel of linear regression: direction – down.

The moving average (20; smoothed) – down.

CCI: -161.2981

Boris Johnson continues to cause European politicians, at least, irritation and misunderstanding, and, at most, outright anger. Yesterday, the British Prime Minister in a conversation with the President of the European Parliament David Sassoli said that Brexit negotiations need to be accelerated, as there is very little time to sign an agreement. Johnson also said that he still wants a civilized and orderly "divorce" from the European Union. Also, Boris Johnson once again said that if the parties do not have time to sign the agreement, then on October 31 there will be an exit without a "deal". Sometimes it seems to us that a daily reminder to everyone (the media, the public, EU politicians) about their readiness to leave the EU according to a "tough" scenario is part of Johnson's plan. The Prime Minister talks about this tirelessly, although, as it turned out a few days ago, official documents indicate Johnson's intention to ask for an extension from the European Union, that is, the opposite. Moreover, it is obliged to do so by a law passed by Parliament in early September, just a few days before the start of the prorogation. Thus, it is not clear to us in what sense is Johnson's daily reminders. By the way, after the same conversation, Sassoli said there was no progress in negotiations with London. And earlier, this was stated by Jean-Claude Juncker. And yesterday, Angela Merkel delivered an ultimatum to Johnson on Brexit. And all the top officials of the European Union openly skeptical about the "generous and fair" proposal of Boris Johnson. Thus, it seems that the progress in the negotiations is visible only to the Prime Minister of the Kingdom, but not to the European side. Thus, the chances of reaching an agreement before the end of the EU summit on October 18 at the moment are almost zero, and we only witness new "loud" statements of the British government every day. The Brexit process itself is firmly stuck in one place.

Yesterday's performance of Jerome Powell left no trace on the pound/dollar pair. Mark Carney also did not interest market participants with his performance. Today, as well as on the first two trading days of the week, no important macroeconomic publications are planned in the UK and the US. Thus, traders will have to continue to rely only on the political twists and turns between Brussels and London, as well as a new speech by the head of the Fed Powell tonight. Possibly, Powell will cover the topic in more detail with the launch of the program for the purchase of short-term bills and report, for example, on the timing of its beginning or the duration of its functioning. Traders also continue to hope that the chairman of the Federal Reserve still hints at the possible actions of the regulator at the end of the month.

From a technical point of view, the pound/dollar pair resumed its downward movement and at the moment, there are no signs of an upward correction. In general, the fundamental background remains not on the side of the British currency, therefore, we have the right to count on a further fall of this currency against the US dollar.

Nearest support levels:

S1 – 1.2207

S2 – 1.2177

S3 – 1.2146

Nearest resistance levels:

R1 – 1.2238

R2 – 1.2268

R3 – 1.2299

Trading recommendations:

The GBP/USD pair has fixed below the moving average line and continues to move down. Thus, today it is recommended to sell the pound/dollar pair with targets of 1.2177 and 1.2146. The bulls lost the initiative again and remain extremely weak, so purchases are not relevant right now.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper channel of linear regression – the blue lines of the unidirectional movement.

The lower channel of linear regression – the purple line of the unidirectional movement.

CCI – the blue line in the regression window of the indicator.

The moving average (20; smoothed) – blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heiken Ashi – an indicator that colors bars in blue or purple.

The material has been provided by InstaForex Company - www.instaforex.com

Overview of EUR/USD on October 9th. Forecast according to the "Regression Channels". Jerome Powell stunned the market but

4-hour timeframe

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Technical data:

The upper channel linear regression: direction – down.

The lower channel linear regression: direction – down.

The moving average (20; smoothed) – sideways.

CCI: -24.9824

Yesterday, we talked several times about the fact that the speeches of the head of the Fed Jerome Powell do not cause any reaction among traders, as they do not contain anything new and interesting. And that evening, Powell shocked the markets by announcing that the Fed was starting to buy up American securities from the open market again. At a meeting of the National Association for Business Economics in Denver, Powell said that recent problems of a "technical nature" had led the regulator to consider buying short-term treasury bills. Powell also said that back in March, the Fed reported that the time will come when the portfolio of securities will begin to expand again. However, Powell said that this is not a new phase of the quantitative easing (QE) program, which was conducted three times between 2008 and 2014. The Fed does not plan to conduct large-scale asset purchases, and purchases of securities will not lead to a significant change in US monetary policy.

At the same time, Jerome Powell said that the US economy does not need to be stimulated, and the labor market and inflation are in a favorable state. Where did the phrase "insufficient inflation" go if the consumer price index itself has not changed for the better in recent months? We believe that Powell has recently begun to openly dissemble. First, he claims that the Fed is independent of political influence, but the organization follows the requests/orders/appeals of Donald Trump. Now Powell says that it's not about the launch of full-scale QE4, but at the same time, assets will be bought from the market. Many traders and analysts have dubbed the Fed's move as a "mini-QE." If long-term government bonds were bought up in the framework of previous QEs, now short-term bills are planned for redemption to "restore the level of reserves in the financial system", but the essence remains the same. Saturation of the open market with the money supply.

The most surprising thing is that traders did not react to this speech of Powell. Either they were reassured by the wording "this is not QE," or they have not yet fully realized that the Fed is starting to re-buy assets on its balance sheet, but the US dollar, paired with the euro, did not budge one iota last night.

Today, again, there will be no macroeconomic publications either in the States or in the European Union. Only in the evening, there will be another speech by Jerome Powell, which will be monitored with increased attention by participants of the Forex market. We are still waiting for at least a small decline in the US currency, but to be able to trade it off, we also recommend waiting for the pair to consolidate above the moving average line.

Nearest support levels:

S1 – 1.0925

S2 – 1.0864

S3 – 1.0803

Nearest resistance levels:

R1 – 1.0986

R2 – 1.1047

R3 – 1.1108

Trading recommendations:

The euro/dollar pair has fixed back below the moving average line, so the trend for the pair has again changed to a downward trend. Thus, the bears are recommended to resume selling the euro currency with the aim of Murray's level of "3/8" – 1.0925. Purchases of the pair can be considered with a target of 1.1047 if the bulls manage to overcome the level of 1.0986.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper channel of linear regression – the blue lines of the unidirectional motion.

The lower channel of linear regression – the purple lines of the unidirectional motion.

CCI – the blue line in the indicator window.

The moving average (20; smoothed) – blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heiken Ashi – an indicator that colors bars in blue or purple.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on October 9. Jerome Powell's speech weakened the position of the US dollar

To open long positions on EURUSD you need:

Fed Chairman Jerome Powell's speech yesterday in which he emphasized the likelihood of launching the asset-purchase program and an increase in bank reserves, all this weakened the position of the US dollar and led to a slight upward correction. However, the bulls, in order to pull the market to their side, need a return to the resistance of 1.0973, where the moving averages are located. Only such a scenario will lead to a larger upward correction to the area of this week's high - 1.1000, where I recommend taking profits. The entire focus in the morning will be shifted to the Eurogroup meeting, which may put additional pressure on the pair. In this case, it is best to look for new long positions after the formation of a false breakdown from the support of 1.0943, or buy the euro for a rebound from a low of 1.0905.

To open short positions on EURUSD you need:

Bears will try to maintain a downward trend, and the formation of a false breakdown in the resistance area of 1.0973 will be the first signal to open short positions, which will lead to the return of EUR/USD to the area of yesterday's low of 1.0943. However, a more important task for sellers will be to break through this range, which will bring the pair to support at 1.0905 and 1.0878, where I recommend taking profits. In case the euro grows above the resistance of 1.0973, amid important fundamental data on the eurozone, it is best to consider selling only after updating the high of the week - 1.1000.

Signals of indicators:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates the possibility that the euro might further fall.

Bollinger bands

In case the EUR/USD declines in the morning, support will be provided by the lower boundary of the indicator around 1.0940. Growth will be limited by the upper limit in the area of 1.0990, from where you can immediately sell the euro for a rebound.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of ETH/USD for 09/10/2019

Crypto Industry News:

The World Federation of Exchanges (WFE), a global trading association of publicly regulated exchanges, has asked the UK Financial Supervision Authority (FCA) not to limit cryptocurrency derivatives to retail investors.

WFE issued a statement today in response to a consultative document from the UK financial regulator regarding a potential ban on the use of cryptocurrency derivatives, such as futures contracts for Bitcoins and other cryptocurrency-related trading products. The WFE proposed that the FCA instead develop appropriate consumer protection.

WFE has included in its reply a number of recommendations, such as the potential implementation of standards for the above products, consideration of basic market structures and review of the ban - if it is introduced - in order to provide consumers with choice and access among others.

WFE Chief Executive Nandini Sukumar called on the authorities to create appropriate provisions enabling further market development, stating:

"Although cryptographic products have real potential, the market has suffered from unregulated suppliers distributing inappropriate products. Market infrastructures that meet stringent regulatory requirements include consumer protection under their mandate and understand that integrity is fundamental to well-functioning markets, they are best prepared to supply these products and support a growing market. "

WFE includes major exchanges from around the world, including the Nasdaq, CME Group, Korea Exchange, London Stock Exchange and Deutsche Boerse.

Technical Market Overview:

The recent low on ETH/USD was made at the level of $166.08, just above the local technical support located at the level of $163.98 - $162.50 and if the momentum will increase on the way up, then the next target for bulls is seen at the level of $187.37 and 195.88. Any violation of support located at the level of $166.08 will open the road towards the key technical support located at the level of $151.30. Currently, the market is hovering around the level of $180.00, but the bulls do not look ready for a breakout as the momentum is still decreasing, so the horizontal trend most likely will continue.

Weekly Pivot Points:

WR3 - $200.05

WR2 - $192.33

WR1 - $180.15

Weekly Pivot - $172.02

WS1 - $159.46

WS2 - $151.65

WS3 - $138.64

Trading recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of BTC/USD for 09/10/2019

Crypto Industry News:

The US Securities and Exchange Commission (SEC) has once again officially stated that Bitcoin is not a security. In a letter to Cipher Technologies, Bitcoin Fund SEC rejected the investment company's registration statement, justifying (among other things) that Bitcoin is not a security. According to a letter, Cipher tried to register an "investment company" in accordance with the 1940 Investment Companies Act, suggesting that Bitcoin is a security.

In turn, SEC employees counter-argued the reason for Cipher as part of the Howey test and the Digital Asset Analysis Framework published in April.

"We do not believe that current Bitcoin buyers rely on the necessary managerial and entrepreneurial efforts of others to make a profit. Therefore, since Cipher intends to invest essentially all its assets in Bitcoin under the current structure, it does not meet the definition of an" investment company "in accordance with the Act on investment companies and incorrectly submitted the N-2 form "- we read.

In addition, the SEC also noted that if Bitcoin were security, "it would cause significant other problems." More specifically, the cryptocurrency would be "an unregistered, publicly offered security and, among other things, would potentially make the proposed fund a guarantor of Bitcoins."

Finally, the securities regulator also noted that Cipher did not comply with legal and investor protection standards, respectively. The letter ends with the statement that "SEC employees will not carry out additional verification of Cipher in its current form."

Technical Market Overview:

The BTC/USD pair did not move out of the narrow price range located between the levels of $7,676 - $8,474 and the global investors keep waiting for the breakout. The bottom of the wave (A) at the level of $7,676 is then in the center of attention of bears now and if violated, then the next technical support is located at $7,405. The increasing downside momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - $9,064

WR2 - $8,729

WR1 - $8,221

Weekly Pivot - $7,955

WS1 - $7,433

WS2 - $7,138

WS3 - $6,572

Trading recommendations:

Due to the short-term impulsive scenario invalidation, the best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of GBP/USD for 09/10/2019

Technical Market Overview:

The GBP/USD pair has hit the 61% Fibonacci retracement level located at the level of 1.2195 and tried to bounce higher, but so far was capped at the technical resistance located at the level of 1.2224. The next technical support is seen at the level of 1.2175. Traders should have this in mind, because of only a clear breakout above the level of 1.2411 will open the road towards the next technical resistance located at the level of 1.2504. It is worth to keep an eye on the current market situation.

Weekly Pivot Points:

WR3 - 1.2623

WR2 - 1.2518

WR1 - 1.2423

Weekly Pivot - 1.2315

WS1 - 1.2215

WS2 - 1.2101

WS3 - 1.2006

Trading recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. In order to reverse the trend from down to up, the key level for bulls is seen at 1.2505 and it must be clearly violated. The key short-term technical support is seen at the level of 1.2231 - 1.2224 and the key short-term technical resistance is located at the level of 1.2381. As long as the price is trading below this level, the downtrend continues towards the level of 1.1957 and below.

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The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of EUR/USD for 09/10/2019

Technical Market Overview:

The EUR/USD pair did not make it through the technical resistance located at the level of 1.0999 and the price moved lower towards the local support at 1.0965 and broke below it. The low was made at the level of 1.0941, so the price fell out of the local channel as well. Nevertheless, the bulls might decide to push it higher anyway as the price is still in a short-term ascending channel. The momentum is still strong and positive, which supports the short-term bullish outlook and the technical support located at the level of 1.0966 should hold the bears. Please remember, that the higher timeframe trend is still bearish.

Weekly Pivot Points:

WR3 - 1.1156

WR2 - 1.1079

WR1 - 1.1037

Weekly Pivot - 1.0957

WS1 - 1.0918

WS2 - 1.0839

WS3 - 1.0797

Trading recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larget timeframes that indicate a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0926 and the technical resistance at the level of 1.1267.

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The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels For EUR/USD, October 09, 2019

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When the European market opens, some economic data will be released such as Eurogroup Meetings. The US will also publish some economic reports such as Treasury Currency Report, 10-y Bond Auction, Crude Oil Inventories, JOLTS Job Openings, and Final Wholesale Inventories m/m, so amid the reports, the EUR/USD pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1014. Strong Resistance: 1.1008. Original Resistance: 1.0997. Inner Sell Area: 1.0986. Target Inner Area: 1.0961. Inner Buy Area: 1.0936. Original Support: 1.0925. Strong Support: 1.0914. Breakout SELL Level: 1.0908. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, October 09, 2019

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In Asia, Japan will release the Prelim Machine Tool Orders y/y and the US will also publish some economic data such as Treasury Currency Report, 10-y Bond Auction, Crude Oil Inventories, JOLTS Job Openings, and Final Wholesale Inventories m/m. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance.3 : 107.67.

Resistance. 2: 107.46.

Resistance. 1: 107.25.

Support. 1: 106.99.

Support. 2: 106.78.

Support. 3: 106.57.

(Disclaimer)

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Forecast for EUR/USD on October 9, 2019

EUR/USD

On Tuesday, the euro retreated from resistance at the Fibonacci level of 138.2% by just over 30 points on concerns over trade negotiations between the US and China, which will begin tomorrow in Washington. There were also rumors about the high likelihood of not concluding a Brexit deal and the EU's readiness to once again give Britain a deferment of the X date. In general, the strengthening of the dollar has a more psychological basis and, as a consequence, is not very qualitative.

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On the daily chart, the signal line of the Marlin oscillator has unfolded from the boundary with the zone of influence of the "bulls", but the double convergence on the oscillator is still valid. It is possible that yesterday there was a market retreat before another attempt to break up.

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On the four-hour chart, the Marlin has infiltrated the decline zone, but the price is firmly held by the support of the indicator lines of balance and MACD. In general, the overall technical picture has not changed; consolidating the price above the Fibonacci level of 138.2% (1.0985) will allow the euro to grow to the MACD line on daily at the price of 1.1042, consolidating the price below the MACD line at H4 (leaving at yesterday's low) will make it possible to attack the signal level of 1.0926, consolidating under which already opens the way from a working target of 1.0845 - to a Fibonacci reaction level of 161.8%.

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Forecast for GBP/USD on October 9, 2019

GBP/USD

The British pound has been falling since the beginning of the week, losses amounted to 72 points yesterday. There are 60 points left to the nearest target of 1.2155 on the morning of today. Slightly lower is the support of the embedded line of the price channel at around 1.2128, and perhaps this goal will be worked out before the correction from the ongoing fall. Consolidating the price at 1.2128 opens the way for a fall to the Fibonacci level of 271.0% at the price of 1.1986.

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On a four-hour chart, the price is under the balance and MACD lines, the Marlin is in the decline zone. We are waiting for the development of lower targets.

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Forecast for AUD/USD on October 9, 2019

AUD/USD

Since the opening of the week, the Australian dollar has developed on the scale of a four-hour chart. All days, until this morning, the price was reflected from the support of the MACD line of a four-hour scale. The signal line of the Marlin oscillator penetrates into the growth zone.

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Now the aussie is ready to close the gap formed at the beginning of the week. The purpose of growth is the line of the price channel of the daily scale near the MACD line at around 0.6790. We the fall to resume from the target level.

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#USDX vs USD / JPY vs EUR / JPY vs GBP / JPY - H4. Comprehensive analysis of movement options from October 09, 2019 APLs

We would like to bring to your attention a comprehensive analysis of the development options for the movement of the cross-instruments EUR / JPY and GBP / JPY , as well as the dollar index #USDX and the currency of the "land of the rising sun" USD / JPY currency from October 09, 2019.

Minuette (H4 timeframe)

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US dollar Index

The development of the USDX dollar index movement will be determined by the development and direction of the breakdown of the boundaries of 1/2 Median Line channel (99.15 - 98.95 - 98.75) Minuette operational scale fork. The details are shown in the animated chart.

The breakdown of the upper boundary of the 1/2 Median Line channel (resistance level 99.15) of the Minuette operational scale fork - the development of the #USDX movement will continue to the boundaries of the 1/2 Median Line Minuette channel (99.25 - 99.40 - 99.55) with the prospect of reaching the equilibrium zone (99.60 - 99.75 - 99.95) of the Minuette operational scale fork.

On the contrary, if the lower boundary of the 1/2 Median Line Minuette channel (support level 98.75), equilibrium zone of the Minuette operational scale fork is broken, the downward movement of the dollar index can continue to the local minimum 98.64 - the upper boundary of ISL38.2 (98.45) equilibrium zone of the Minuette operational scale fork.

The details of the #USDX movement are presented in the animated chart.

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US dollar vs Japanese yen

The currency of the "country of the rising sun" in the equilibrium zone of the Minuette operational scale fork, respectively, further development of the USD / JPY movement from October 9, 2019 will be due to the development and direction of the breakdown of boundaries (107.00 - 106.80 - 106.55) of this equilibrium zones. The movement markup is shown in the animated chart.

In case of breakdown of the upper boundary of ISL38.2 (resistance level of 107.00), of the Minuette operational scale fork, then the upward movement USD / JPY will be directed to the boundaries of the 1/2 Median Line Minuette channel (107.55 - 107.72 - 107.90) and the UTL control line (108.15) of the Minuette operational scale fork.

The breakdown of support level 106.55 on the lower boundary of ISL61.8 of the Minuette operational scale fork together with support level of 106.45 will determine the development of the currency of the country of the rising sun inside the 1/2 Median Line channel (106.45 - 105.90 - 105.40) of the Minuette operational scale fork.

The details of the USD / JPY movement, depending on the breakdown direction of the above equilibrium zone, are shown in the animated chart.

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Euro vs Japanese yen

The development of the cross-instrument movement EUR / JPY from October 9, 2019 will continue in the equilibrium zone (117.95 - 117.30 - 116.70) of the Minuette operational scale fork. The markup of this movement is shown in the animated chart..

The breakdown of the lower boundary of ISL61.8 (support level of 116.70) of the Minuette operational scale fork will direct the EUR / JPY movement to the local minimum 115.84 and the boundaries of 1/2 Median Line Minuette channel (115.10 - 114.70 - 114.30).

In case of breakdown of the upper boundary of ISL38.2 (resistance level of 117.95) of the Minuette operational scale fork, the upward movement of this cross-instrument will continue to the boundaries of the 1/2 Median Line channel (118.65 - 119.10 - 119.55) of the Minuette operational scale fork.

The details of the EUR / JPY movement depending on the development of the Minuette equilibrium zone are presented in the animated chart.

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Great Britain pound vs Japanese yen

Meanwhile, the development of the GBP / JPY cross-instrument movement from October 9, 2019 will be determined by the direction of the breakdown of the range :

  • resistance level of 130.90 (lower boundary of the ISL61.8 equilibrium zone of the Minuette operational scale fork);
  • support level of 129.97 (upper boundary of the 1/2 Median Line channel of the Minuette operational scale fork).

The breakdown of support level of 129.97 will confirm that further movement of the cross-instrument will be developed inside the 1/2 Median Line channel (129.97 - 128.50 - 127.00) and the equilibrium zones (128.75 - 127.00 - 125.40) of the Minuette operational scale fork.

If you return above ISL61.8 Minuette (resistance level of 130.90), the development of the GBP / JPY movement will begin to occur again in the equilibrium zone (130.90 - 131.95 - 133.00) of the Minuette operational scale fork with the prospect of reaching the initial SSL (133.85) and control UTL (134.50) lines of the Minuette operational scale fork.

The movement options, depending on the breakdown direction of the above range, are shown in the animated chart.

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The review is made without taking into account the news background. Thus, the opening of trading sessions of the main financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where the power coefficients correspond to the weights of the currencies in the basket:

Euro - 57.6%;

Yen - 13.6% ;

Pound Sterling - 11.9%;

Canadian dollar - 9.1%;

Swedish Krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the start date of the countdown - March 1973, when the main currencies began to be freely quoted relative to each other.

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Dollar and euro understand the intricacies of monetary policy and wonder if the United States and China will smoke the pipe

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What is more important at the moment for financial markets: monetary policy or trade conflicts? What events will they most vigorously respond to: the publication of the minutes of the September meetings of the FOMC and the Governing Council of the ECB or the resumption of trade negotiations between Washington and Beijing?

According to a survey recently conducted by BofA Merrill Lynch among large investors, 40% of respondents consider trade war to be the main threat to financial markets, and only 13% consider ineffective monetary policy as the main risk. It is believed that the dovish rhetoric of the Federal Reserve can weaken the US dollar only temporarily, since the demand for the greenback will still remain high due to its status as a safe-haven.

Goldman Sachs estimates that US President Donald Trump's "tweets" related to trade disputes have reduced the estimated yield on futures on the federal funds rate by approximately 60 basis points, while due to criticism from the head of the White House to the Fed, the figure decreased by only 10 basis points.

At the end of this week, another round of US-Chinese trade negotiations in Washington is due to take place.

Beijing has already warned that it does not intend to revise its industrial policy and approach to government subsidies, but expressed its willingness to partially conclude a deal on already agreed issues, such as the purchase of American agricultural products.

The USD/JPY pair sharply grew on the assumption that the US president could seize on this proposal in order to divert attention from the impeachment procedure and strengthen the stock market. The main question is whether the United States will ease its tariff regime. This step may initiate the USD/JPY rally, especially amid lower expectations for the Fed's monetary easing. However, if America rejects the peace pipe and tries to squeeze more serious concessions from China by refusing to abolish tariffs, the greenback will quickly lose all its profits against the yen.

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D. Trump has reiterated that he is ready to consider only a comprehensive agreement with China. Apparently, he continues to hold this view. Meanwhile, White House Chief Economic Adviser Larry Kudlow noted that Washington is open for a short-term deal if at some point a plan for resolving structural issues is visible. He also praised Beijing for having recently become a bit more active, as evidenced by increased purchases of agricultural products in the United States.

Based on the fact that the influence of monetary policy on financial markets is gradually weakening, the muffled reaction of the EUR/USD pair to the publication of the minutes of the September FOMC meeting is unlikely to be surprising. At the last meeting, the Federal Reserve lowered the interest rate by 25 basis points and could well discuss the idea of completing preventive measures, but then the regulator did not yet know about a serious drop in business activity in the United States. In this regard, the split in the ranks of the Governing Council of the ECB seems to be a more significant event than the hawkish rhetoric of the Fed. Therefore, EUR/USD going beyond the short-term consolidation range of 1.096–1.1 may be short-lived. The bulls may take advantage of the reduction in quotes for purchases on expectations of the limited potential for monetary expansion by the ECB, while the bears may resort to sales on growth in the hope that there will be no progress in the trade negotiations between Washington and Beijing.

Meanwhile, the absence of a compromise solution on Brexit that would suit three parties (Britain, Ireland and the European Union) is becoming increasingly critical for financial markets as the deadline for the release of Great Britain from the EU approaches (October 31).

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The High Civil Court of Scotland ruled that British Prime Minister Boris Johnson is not obliged to ask the EU for the transfer of Brexit. He noted that the head of government agreed to abide by the law, so there is no need for coercive measures. Investors were disappointed with this, because a positive decision would have ruled out the hard Brexit scenario. Now we have to find out whether B. Johnson will remain true to his word: the ball is now on the side of the EU, since he proposed his own version of the deal.

According to The Daily Telegraph, the British Cabinet intends to veto the seven-year budget of the EU, which should be adopted in March next year, as well as refuse to cooperate with the EU in the field of defense and security if Brussels refuses the proposed B. Johnson deal or not will allow him to hold a hard Brexit.

Reaching an agreement between the United Kingdom and the EU on Brexit has become virtually impossible after a telephone conversation this morning between British Prime Minister Boris Johnson and German Chancellor Angela Merkel, the BBC television channel reported with reference to a source in the office of the British prime minister.

B. Johnson presented the German chancellor with the proposals that the EU had recently submitted, however, A. Merkel made it clear that an agreement on their basis is unlikely.

She stated that a Brexit deal was possible only if Northern Ireland remained in the EU customs union.

"A similar demand from Berlin makes a deal impossible. Thus, the negotiations in Brussels are close to a breakdown, despite the fact that the UK has come a long way," the prime minister said in an office.

Against this background, the GBP/USD pair fell to weekly lows in the 1.2210 area.

Brexit is running out of time until the next deadline, so pressure on the British currency is likely to increase.

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What will the looped sideways lead to, to a cold winter or is there still a chance of growth, Bitcoin (October 8)

The cryptocurrency market has sagged very much since the end of September, the first cryptocurrency has lost an average of 20% relative to the $ 10,000 milestone, eventually focusing within the $ 7,800 mark. After that, the disappointed investors went into the stage of a sluggish fluctuation of 7800/8500, where the quotation is still located. The return of the harsh winter of 2018 to colic scares already frightened traders. The cryptocurrency market is disappointingly declining, IEO, an analogue of the ICO hype, does not bring decent profit and is already disappointingly going into existence. The launch of the Bakkt crypto platform, from which an influx of institutional investors was expected, was launched with ridiculous trading volumes, and regulators are increasingly skeptical about the future of the crypto industry. In the end, we have what we have, but I think this is not the end.

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Digest of bygone days:

  • Against the cryptocurrency Tether and the Bitfinex exchange filed a lawsuit for $ 1.4 trillion. According to lawyers, in this case there is a violation of the antitrust laws and the law "On commodity exchanges", since Tether controls more than 80% of the stablecoins market in the USA and the world. The exchange is also accused of manipulation, money laundering and the provision of knowingly false information.
  • Not the best information for the crypto industry, but similar raids on the Bitfinex structure have already been in history, let's see how things go this time.
  • German Finance Minister Olaf Scholz called on EU leaders to create a cryptocurrency analogue of the euro so as not to lag behind the US, China and Russia, as well as private companies that create digital payment assets.
  • These calls from the Europeans have already sounded earlier, but to a greater extent the result is zero.
  • The World Federation of Exchanges [WFE] turned to the financial regulator of Britain [FCA] with a request not to prohibit cryptocurrency derivatives trading in the country for retail investors. Let me remind you that the World Federation of Exchanges unites 70 operators, such as ICE, Nasdaq, Deutsche Boerse, CME, etc.
  • The US Securities and Exchange Commission (SEC) has once again contributed to the current market by stating that they do not consider Bitcoin to be valuable paper, as investors are not dependent on third parties for making a profit.
  • Valdis Dombrowski, Vice President of the European Commission [EC] for Financial Services and Economics, has promised that the EC will introduce new rules for regulating the cryptocurrency industry, but with one comment - its re-election to this position.
  • As we can see, the information background has a considerable burden of alertness, which fully reflects the current behavior of the first cryptocurrency [BTC].

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What do we have on the trading chart?

Monday favored bitcoin, and the quote locally managed to grow as much as $ 444, but this did not change anything in the current situation, we continue to fluctuate within the given frames 7800/8500.

What are the assumptions for further development?

At the moment, nothing dramatic in terms of changing market sentiment is visible. Motion in a given amplitude [7800/8500] can still be maintained throughout the week. The speculative mood is very skeptical, and here we need some kind of clear impetus in terms of information in the form of the hope of traders that the harsh winter of 2018 is postponed. Perhaps a yield higher than 8800-9000 will give optimism to speculators, but I think not earlier than this. Therefore, we sit outside the market and observe what is happening, preferably in USD, and as soon as there is a prerequisite for the move, again in the region of 8800-9000, you can go for an exchange of USD ---> BTC.

Key coordinates for the upward stroke: 8500; 9400; 10000; 10,950; 12330; 13130; 13970.

Key coordinates for the downward course: 7800; 7000; 6500; 6000.

The general background of the cryptocurrency market

Analyzing the general market capitalization, we see a very sluggish development in the range of $ 209 and $ 225 billion. Over a month more than $ 62 billion was lost from the piggy bank of total market capitalization, at the moment we are at around $ 222.19 billion.

If we consider the volume chart in general terms, then the current ceilings are 225 ---> 272 ---> 281 ---> 320 ---> 356 ---> $ 385 billion.

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The index of emotions, which is also fear and the euphoria of the crypto market, is surprisingly at 39p, which is almost the same as it was in September before the fall. Nevertheless, optimism among crypto enthusiasts still persists, let's hope for the best.

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Indicator analysis

Analyzing a different sector of timeframes (TF), we see that indicators on the short and intraday interval signal about purchases, and the medium-term outlook about sales. It is worthwhile to understand that the price movement is in a given corridor, as I wrote above, and, obviously, depending on the development of a particular border, the indicators on the short-term and intraday interval will change. That is, we have local indicators, consider this in the work.

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Oil geopolitics is not scary

The end of the automobile season in the United States and the trade wars set the direction for the current movement of oil prices. Black gold reacts to events in Saudi Arabia, Iraq and Ecuador by a temporary rise in quotations, however, these factors quickly recoup, and the initiative returns to the hands of the "bears". Having examined the current oil market conditions by bones, speculators are not tired of reducing their net "bullish" positions. As of October 1, combined Brent and WTI longs fell to 388710 futures and options contracts. This is the smallest figure since February.

The dynamics of speculative positions by WTI

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These are modern realities: geopolitics scare investors for only a short time. So it was with the seizure by Iran of tankers in the Strait of Hormuz, with an attack on industrial facilities in Saudi Arabia. This is now happening with mass protests in northern Iraq. The second producer of OPEC has the main facilities in the south. In particular, there is the port of Basra, through which 3.5 million bpd passes. This, by the way, is 95% of the indicator throughout the country. As for the problems with supplies from Ecuador due to the political crisis inside this state, this is a drop in the ocean. Statistical error (Quito speaks of losses of 59.45 thousand bpd), which can be neglected.

Obviously, the main reason for the closure of Brent and WTI in the red zone for two consecutive quarters is the fear of a slowdown in global demand. Even the loss of speed by American mining and the willingness of Saudi Arabia and Russia to stabilize the market by reducing production do not frighten the "bears" of black gold. Following the slowdown in China's GDP growth and the growing risks of a recession in Germany's economy, the negative began to come from the United States, where business activity in the manufacturing sector collapsed to its lowest level in the last decade. The US is beginning to feel the pain of trade wars, and oil cannot remain insensitive to the troubles of one of its largest consumers.

A strong role in the bearish trend in Brent and WTI is played by a strong dollar. Contrary to weak statistics from purchasing managers and the rise in the likelihood of a federal funds rate cut in October from 40% to almost 90%, the USD index remains stable. It is helped by the uncertainty surrounding the Washington-Beijing trade negotiations and the associated high demand for safe haven assets. If after a meeting on October 9-10, the United States does not want to raise tariffs or cancel part of them, strengthening the global risk appetite can become a serious catalyst for the rally of black gold. On the contrary, the escalation of the conflict will inflict another blow on the positions of the bulls on Brent and will increase the risks of continuing the downward course in the direction of $47-47.5 per barrel.

Technically, we are talking about a target of 161.8% according to the AB = CD pattern. To return to the game, the "bulls" need to attack resistance at $58.8 (Pivot level). Success in this event will increase the chances of oil buyers to correct to $62.2-62.7 per barrel.

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Hard Brexit and soft pound: guaranteed blow

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Britain's withdrawal from the European Union without an agreement will not do without negative consequences, experts never tire of repeating. The implementation of such a scenario will primarily hit the British currency, which will become a kind of "plasticine" during the "hard" Brexit. In this regard, analysts fear a total collapse of the pound.

In the past few months, the British currency has been under tremendous pressure. The reason for this is the political instability in the UK, which has become chronic. The debate over the country's exit from the EU does not subside, but does not bring tangible results. It is almost impossible to get out of this situation without losses for the British economy and the pound, analysts say.

Analysts believe that this week will be the key for the GBP/USD pair. Currently, the pair is trading within 1.2269–1.2272. The pair fell to 1.2260 in the moment. The dynamics of the pound is actively influenced by the restrictions put forward by Brussels for London. Recall, the EU leadership has set a deadline for the United Kingdom on October 11, so that the British authorities provide new conditions for the deal. The previous scenario with the provision of Northern Ireland the right to choose customs regulations between the EU or the UK in the event that the euro bloc refused control at the border was considered unacceptable. Brussels believes that this undermines the foundations of a single European market. Analysts are certain that UK Prime Minister Boris Johnson's team has no other options, and no breakthrough should be expected by the end of the week.

Currently, the British currency is becoming cheaper not only against the US dollar, but also against the yen. Both currency pairs, GBP/USD and USD/JPY, are suitable for opening short positions, analysts said. They pay attention to the formation of the "third wave" pattern in relation to the pair with the pound and advise them to sell when the bar falls below 1.2273. It seems this moment has come.

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If the UK leaves the eurozone without a deal, the Bank of England will take the brunt. Representatives of the regulator argue that it is ready for such a turn. However, not all experts share this optimism, believing that exit without an adaptation period will lead to disastrous consequences for the economy. It will require a large-scale operational reaction of the authorities, whose potential is limited.

Analysts offer two options for the possible actions of the British regulator in the event of withdrawal from the EU without an agreement:

1) "Hard" Brexit until October 31, 2019. Management of the Bank of England, led by Mark Carney, claims to be ready to eliminate economic and financial turmoil in the implementation of this scenario. Analysts say that in this case, the regulator has a backup plan. At the same time, the Bank of England notes that they are unlikely to be able to restrain market unrest. According to M. Carney, the main thing is to prevent problems in the financial system so that the situation does not worsen. If the markets are in a state of free fall, the head of the regulator can convince investors of their willingness to provide liquidity if necessary. At the next meeting, scheduled for November 7, 2019, M. Carney may consider the adoption of additional incentive measures.

2) Brexit without a deal on October 31, 2019. If the UK leaves the EU within the planned time period, problems cannot be avoided either, analysts said. Despite the fact that the British regulator is ready for any manifestations of a liquidity crisis, it may be powerless in the face of a wave of volatility that will overwhelm the markets. Such a development of events is not excluded, especially if market participants hope to the last that one of the parties will make concessions. Many economists are certain that Brexit without an agreement will be accompanied by a softening of monetary policy, even if inflation exceeds the 2% target level. According to forecasts of Bloomberg Economics analysts who declare withdrawal without a deal in January 2020, the regulator will reduce the key rate by 70 basis points (bp) to 0.05%.

The first "victim" of the chaotic Brexit will be the British currency. The pound will be dealt a sensitive blow, economists are certain. If the country leaves the EU without a deal, sterling will drop to an extremely low $1.1100 from current levels of $1.2277–1.2280. At the same time, analysts believe that regardless of the extent of the national currency devaluation, the Bank of England will not conduct direct interventions. Last month, M. Carney said that the likelihood of such measures is extremely small. This is only possible in the event of a complete collapse in the financial market, but currency experts and politicians hope for the best.

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Pound is sinking: Angela Merkel voiced a deliberately impossible ultimatum

The pound shows increased volatility today. The British pound significantly plummeted throughout the market in the afternoon, reacting to the next piece of news regarding Brexit prospects. At the same time, traders of the GBP/USD pair are somewhat ahead of events: the European Union has not yet officially announced its position regarding Johnson's latest proposals. Having felt a false start, the pair pushed off the support level of 1.2200 (the lower line of the Bollinger Bands indicator on the daily chart), but, nevertheless, continues to show bearish sentiment.

By and large, traders pre-win upcoming events that do not promise the pound anything good. At the weekend, French President Emmanuel Macron assured Johnson that Brussels would announce a consolidated position on the latest proposals of the British prime minister by the end of this week. Although the negotiation process has not yet been completed, alarming signals began to come to the market, indicating a looming failure. At the moment, the information is fragmentary - many news agencies or major publications broadcast the position of a member of the negotiating group, citing anonymous sources. But if you put this puzzle together into a single picture, you can come to the conclusion that the negotiations are really doomed to failure, despite some seemingly encouraging factors.

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So, today a telephone conversation took place between Johnson and Angela Merkel, who over the past months have repeatedly hinted at a possible compromise with London. For example, in mid-August, the Chancellor surprised market participants with her peaceful rhetoric - she announced that Britain and the EU would definitely find an alternative to back-stop within 30 days, thereby solving the main Brexit problem. Merkel was unusually optimistic about further relations, whereas earlier, in similar negotiations with Theresa May, she took a much more rigid and uncompromising position. Such a dissonance then provided substantial support for the British currency.

But over time, it became clear that Merkel's optimism was premature: the backstop problem was not resolved in either 30 or 50 days. today, the German chancellor actually put an end to the negotiation process between London and Brussels. It is worth mentioning right away that this information is unofficial, since neither the German government nor Downing Street commented on today's dialogue between the leaders of the countries. But according to anonymous sources of German publications, Merkel responded to Johnson's proposals with an unquestioning condition: Brussels would make a deal with London only if Northern Ireland remained within the framework of the European Customs Union. All alternatives, including the "translucent border" scenario, will not even be considered at the EU summit.

According to the British press, after this conversation, Boris Johnson told his closest associates that negotiations with Brussels were unsuccessful, and the deal with the EU is "impossible in principle" because of the Europeans' position regarding the Irish border regime.

Thus, if the above information is officially confirmed in the near future, London will have only one option for the development of events: the country goes to early elections after prolonging the negotiation process until January 2020. Tthis is far from a positive scenario for the British currency. Indeed, judging by the results of recent opinion polls, conservatives continue to outstrip the Labor Party by 8-10%, despite all the previous scandals. In other words, early elections will not solve the problem as a whole, and on the contrary, they will only aggravate it. The current composition of the House of Commons is categorically against the hard Brexit, despite the fact that the deputies failed the draft deal three times during the period of Theresa May's premiership. What moods will dominate the next composition of the British Parliament is an open question. With the help of elections, Johnson can remove the last barrier that prevents him from playing the "big game": according to some experts, the prime minister deliberately leads the country to a hard Brexit, so that in the last days or even hours before the "X moment", Europe will still flinch and go to a compromise.

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Given these prospects, it can be assumed that the British currency will be under strong pressure in the near future. Most likely, bears of the GBP/USD pair will still sell the support level of 1.2200 and will go to the lower boundary of the Kumo cloud, which corresponds to the level of 1.2120. However, this target is not the limit of the downward movement: if the parties finally "slam the doors," then the pound will again return to the area of multi-year lows, that is, to around 1.1980 (the lower line of the Bollinger Bands indicator is already on the weekly chart).

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